WestVic Dairy News - September 2010 Edition
Dairyfarmer and Fodder / Grain grower work together
By Rachael Ward, DPI Colac
Introduction
Some dairy farmers buy grain or hay directly from growers. This study, as part of the SW Adaptive Forages Project, describes the relationship and business arrangement of one dairy farmer and the grower from whom he purchases grain and hay.
The arrangement is win-win for both parties. A major part of their strong relationship is open communication. This agreement works well in this situation, but may not work necessarily work in other situations.
The dairy farmers
Mark Billing and Sam Simpson run a 450 cow herd over approximately 224 hectares milking area. They also lease a 180 hectare run-off block across the road.
The grain and hay growers
Brent Schnaars and his family have a 1,500 hectare farm just north of Nhill, growing barley, vetch, wheat and beans. Brent’s wife Anne holds Fodder Care accreditation with the Australian Fodder Industry Association (AFIA). As the farm is regularly audited, Anne ensures on-farm quality assurance measures are met. This means the hay produced is always a quality product. Grain is quality assured through the Hazard Analysis Critical Control Point (HACCP) system, audited by SGS laboratories.
Stock feed
Mark now gets all his purchased vetch and cereal hay and about 400 tonne of barley each year from the Schnaars.
Mark started buying hay from the Schnaars in 2004 and the relationship has developed from then. Mark extended his order to barley about two years ago after Brent brought down a bag of the barley to double check that it was suitable to go through his roller mill.
Mark does a feed budget to determine how much purchased feed he will require. The amount of vetch hay is relatively consistent from year to year, at about 200 tonnes per year. The amount of cereal hay varies from year to year. Mark lets Brent know as soon as he has it worked out if he needs more or less product than previously agreed.
Each load of grain that Brent brings to Mark’s farm is accompanied by a statutory declaration. The hay has AFIA Fodder Care accreditation, which is the guarantee of the quality of the product. Milk companies value the Fodder Care program and encourage their suppliers to buy hay from Fodder Care accredited suppliers.
What works well?
The relationship between Mark and Brent is open and they are upfront about issues. Brent produces more than Mark requires, but due to their strong relationship, Mark gets first priority for grain and hay. Brent said that one reason this relationship works well is because there is no middle man.
Brent’s business prides itself on producing quality products with all hay and grain feed tested. Brent knows what Mark requires for his dairy herd and faxes the feed test results straight to Mark to check over and then the pair discuss price.
Mark keeps an eye on current prices and availability as an indication of what he is likely to pay. He is happy to pay a premium for quality and knowledge that the product is well stored. The payment terms are generally 14 days. Paying Brent is the first priority for Mark. If there are any issues with the payment terms Mark is upfront with Brent and they work together for a suitable outcome.
Mark visits Brent’s farm at least once a year to look over the crops. This generally occurs just before he starts cutting silage. Brent also regularly visits Mark’s farm while delivering grain and hay. This practice helps to enhance the relationship as they can see for themselves how everything is looking.
What didn’t work well?
Originally, a third party transported the hay from Nhill to Colac. This worked to start off with, but over time the company expanded and started to be less reliable. Brent upgraded his truck and now transports the hay or grain himself.
Ensuring quality
Brent aims to produce quality products by determining what the buyer wants and meeting their needs. For example the buyer might want pure vetch or a mixture of vetch and barley. Brent and family monitor their crops, spray appropriately, and cut and bale in a timely manner. The hay is then put in a shed as soon as possible.
The AFIA Fodder Care program also helps to ensure quality products. There are three parts to the program: Paddock inspection records, Chemical application records and Harvest records. The on-line program audits itself by cross checking chemical applications against the recommended chemical label rates. Growers are alerted if chemicals are used outside the label recommendations. As well, a proportion of accredited growers are audited annually.
Conclusion
The strong business relationship between Mark and Brent has developed over time. The relationship is win–win for both parties. Both have an understanding of the other’s business and are upfront about issues they are facing. This is a great example of how dairy farmers can work directly with grain and hay growers.
